Exhibit 10.308
ALLSTATE LIFE INSURANCE COMPANY
ALLSTATE PLAZA SOUTH, SUITE G5C
NORTHBROOK, ILLINOIS 60062
August 10, 2004
Inland Western Easton Forks Town, DST
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Allstate Life Insurance Company
Loan No. 122483
Forks Towne Center
Xxxxxxxx Trail & Old Mill Road
Easton, Pennsylvania (the "Property")
Ladies and Gentlemen:
Reference is made to our Commitment Letter dated June 22, 2004, as amended
(the "Commitment") with respect to a $10,395,000 loan (the "Loan") to be
evidenced by a Mortgage Note of even date herewith, payable to Allstate Life
Insurance Company in the principal amount of $10,395,000 (the "Note"), and to be
secured by an Open-End Mortgage, Assignment of Leases, Rents and Contracts,
Security Agreement and Fixture Filing of even date herewith (the "Mortgage")
encumbering the Property. Initially capitalized terms used but not otherwise
defined in this letter agreement (the "Letter Agreement") have the same meanings
given them in the Mortgage.
In consideration of your execution and delivery of the documents
evidencing, securing or otherwise pertaining to the Loan (the "Loan Documents"),
you (the "Borrower") and we ("Lender") hereby agree as follows:
1. RELATED AGREEMENT. This Letter Agreement shall constitute a Related
Agreement.
2. IMPOUNDS. With regard to the provisions contained in Section 1.06 of
the Mortgage requiring Borrower to deposit 1/12 of the annual amounts of real
estate taxes, regular and special assessments and insurance premiums, Lender
hereby agrees to defer collection of such monthly deposits for so long as (a)
Borrower is the sole fee simple owner of the Property; and (b) no Event of
Default exists under the Loan Documents and no condition or event exists which
with notice, the passage of time, or both, would constitute an Event of Default;
and (c) at Lender's election, Borrower either pays for a tax reporting service
or Borrower promptly and consistently furnishes evidence that taxes and
insurance are being currently paid.
3. EARTHQUAKE INSURANCE. With regard to the provisions contained in
Section 1.02 of the Mortgage requiring Borrower obtain earthquake insurance
coverage on the Property, Lender hereby agrees to waive such requirement until
such time as such coverage is available at
commercially reasonable rates and in Lender's reasonable opinion such coverage
is generally required by other institutional lenders.
4. XXXXXXXX'S RIGHT TO TRANSFER THE PROPERTY. Notwithstanding the
provisions contained in Section 1.08 and other applicable provisions of the
Mortgage, Borrower shall have a one time right, provided there is no default or
an event which, with notice or the passage of time, or both, could result in a
default by Borrower under the Loan Documents, to assign, sell or transfer all of
the Property (the "Permitted Transfer") to a party with experience, reasonably
satisfactory to Lender, in managing property similar to the Property and whose
financial condition is reasonably satisfactory to Lender ("Permitted
Transferee"). The Permitted Transfer shall be further conditioned upon:
(a) the payment by Borrower to Lender of a transfer fee equal to one
percent of the outstanding principal balance of the Note (a nonrefundable $5,000
deposit toward such transfer fee shall be due at the time Borrower initially
requests a Permitted Transfer, the balance of the transfer fee shall be due on
the closing of the transaction);
(b) the reimbursement of all of Xxxxxx's expenses, including legal fees,
incurred in connection with the Permitted Transfer;
(c) the Permitted Transferee and such general partners or principals of
Permitted Transferee as Lender may request, assuming, in form and substance
satisfactory to Lender, all obligations of Borrower under the Loan Documents,
including, without limitation, the Environmental Indemnity Agreement and the
Nonrecourse Exception Indemnity Agreement, with the same degree of recourse
liability as Borrower and subject to the same exculpatory provisions;
(d) Xxxxxx's receipt of a title policy complying with the requirements of
the Commitment, updated to the date of the Permitted Transfer, evidencing that
such Permitted Transfer will not adversely affect Xxxxxx's first and prior lien
on the Property or any other rights or interests granted to Lender under the
Loan Documents;
(e) Xxxxxx's receipt of opinions of counsel acceptable to Lender that all
previous opinions, pertaining to Borrower are true with respect to the Permitted
Transferee and the Permitted Transferee has duly assumed the Loan Documents, and
same are valid and enforceable against Permitted Transferee and the Property;
and that Borrower has the requisite power and authority to properly transfer the
Property;
(f) the Property having maintained a Debt Coverage Ratio of not less than
200 percent for the 12 month period ending 30 days before the date of the
Permitted Transfer and the Property having a projected Debt Coverage Ratio for
the next 12 months based on the most recently approved and certified financial
statements and annual rent roll of not less than 200 percent;
(g) the Permitted Transferee paying to Borrower at least 45 percent cash
down payment on the date of the Permitted Transfer;
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(h) Xxxxxx's receipt and approval of the purchase and sale contract and
copies of the proposed transfer documentation;
(i) Xxxxxx's receipt and approval of the Permitted Transferee's resume and
financial statements; and
(j) Xxxxxx's receipt and approval of an updated MAI appraisal by an
appraiser satisfactory to Lender (prepared at Borrower's expense) specifically
confirming a loan to value ratio of no more than 55 percent.
In addition, Borrower shall have the right, provided there is no default or
an event which, with notice or the passage of time, or both, could result in a
default by Borrower under the Loan Documents, to make a Permitted Transfer to
INLAND WESTERN RETAIL REAL ESTATE TRUST, INC., a Maryland corporation ("Owner"),
the sole owner of Borrower, so long as (x) Borrower pays to Lender a transfer
fee equal to $5,000, (y) the Owner assumes, in form and substance satisfactory
to Lender, all obligations of Borrower under the Loan Documents, including,
without limitation, the Environmental Indemnity Agreement, with the same degree
of recourse liability as Borrower and subject to the same exculpatory
provisions, and (z) the conditions and requirements set forth in subparagraphs
4(b), (d) and (e) above are satisfied.
Net Operating Income shall be certified to be true and correct by the
managing general partner, manager or chief financial officer of Borrower.
5. RIGHT TO CHANGE OWNERSHIP INTERESTS IN BORROWER. Notwithstanding the
provisions contained in Section 1.08 and other applicable provisions of the
Mortgage, so long as Owner maintains its status as a Real Estate Investment
Trust (a "REIT") any encumbrance, security interest or assignment or transfer of
ownership of all types and classes of the shares of Owner shall not constitute
an improper encumbrance or transfer.
6. DAMAGE TO PROPERTY. With regard to the provisions contained in Section
1.04(A) of the Mortgage requiring Borrower to notify Lender of damage to the
Property, the cost threshold for notification shall be increased to One Hundred
Thousand Dollars ($100,000). With regard to the provisions contained in Section
1.04(B) and 1.04(C) of the Mortgage regarding the estimated cost of restoration,
the threshold amounts shall be increased to Two Hundred Fifty Thousand Dollars
($250,000).
7. INSURANCE. Lender hereby approves the insurance evidenced by the
certificates attached as EXHIBIT A hereto.
8. PROPERTY MANAGER. Xxxxxx xxxxxx approves Inland Northwest Management
Corp. as manager of the Property, subject to its execution of the letter
attached as EXHIBIT B hereto.
9. RIGHTS PERSONAL TO BORROWER. This Letter Agreement shall be binding
upon Borrower and its successors and assigns, except that the rights granted to
Borrower in paragraphs 2 -- 8 of this Letter Agreement shall be personal to
Borrower and shall not inure to the benefit of any subsequent owner of the
Property. In the event Lender transfers all or any part of the Loan or any
interest in the Loan Documents to any other person or entity, Xxxxxx agrees to
notify such transferee(s) of the existence of this Letter Agreement and the fact
that it is binding upon
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Xxxxxx's successors and assigns by delivering such transferee(s) a true, correct
and complete copy of this Letter Agreement concurrently with such transfer
accompanied by a letter of transmittal from Lender advising such transferee(s)
of the binding nature of the provisions of this Letter Agreement. Lender will
send a copy of its letter of transmittal and the enclosure to Borrower, and
Xxxxxxxx's name will be shown on the face of the original letter of transmittal
as an addressee thereof.
* * * * *
[Signature Page Follows]
Very truly yours,
ALLSTATE LIFE INSURANCE COMPANY,
an Illinois insurance corporation
By: /s/ [ILLEGIBLE]
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By: [ILLEGIBLE]
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Its Authorized Signatories
Accepted and agreed:
INLAND WESTERN EASTON FORKS TOWN, DST
a Delaware statutory Trust
By: INLAND WESTERN RETAIL REAL ESTATE
TRUST, INC., a Maryland corporation,
Its Signatory Trustee
By: Xxxxx X Xxxxxx
---------------------------------
Its: Asst Secretary
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Dated: August 10, 2004
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EXHIBIT A
INSURANCE CERTIFICATES
EXHIBIT "B"
[INLAND(R) LOGO]
Inland Northwest Management Corp.
0000 Xxxxxxxxxxx Xxxx
Xxx XxxxX, Xxxxxxxx 00000
000-000-0000 Fax: 000-000-0000
PROPERTY MANAGER LETTER
INLAND NORTHWEST MANAGEMENT CORP.
August 10, 2004
Allstate Life Insurance Company
c/o Allstate Investments, LLC
Allstate Plaza South, Suite G5C
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Commercial Mortgage Division
Re: Allstate Life Insurance Company
Loan No. 122483
Forks Towne Center
Xxxxxxxx Trail & Old Mill Road
Easton, Pennsylvania (the "Property")
Ladies and Gentlemen:
The undersigned ("Manager") is the current property manager of the
Property pursuant to that certain Management Agreement (the "Agreement")
dated July 27, 2004 by and between INLAND WESTERN EASTON FORKS TOWN, DST, a
Delaware statutory trust ("Owner") and Manager. In consideration of your
making the Loan to Owner (Manager being an affiliate of Owner), Manager
acknowledges and agrees to the following:
1. Allstate, in its sole discretion, may terminate the Agreement by
notice to Manager upon acquisition by Allstate of title to the
Property by foreclosure, deed in lieu of foreclosure, or other
transfer of the Property or upon Allstate otherwise obtaining
possession of the Property by any lawful means. Upon the
appointment of a receiver or court appointed officer, either
Allstate or such receiver or officer may terminate the Agreement
in its sole discretion by notice to Manager.
2. Manager waives any right to create a lien against the Property to
secure payment of unpaid management fees.
3. Upon the occurrence of, and during the continuation of, a default
under any of the documents evidencing the Loan which has not been
cured in. Allstate's sole judgment, all management fees paid or
payable to Manager thereafter shall be subordinate to amounts
owed to Allstate under such Loan documents.
4. Upon the occurrence of, and during the continuation of, a default
under any of the documents evidencing the Loan which has not been
cured in Allstate's sole judgment, all management fees and other
sums received by Manager thereafter in connection with management
of the Property shall be held in trust for the benefit of
Allstate.
5. Until Allstate elects to terminate the Agreement as provided
herein, Manager will perform all of its obligations, covenants,
conditions and agreements under the Agreement for the benefit of
Allstate and its successors and assigns, so long as Allstate
performs the duties and obligations of Owner under the Agreement
accruing after the date Allstate exercises its rights under the
Mortgage.
INLAND NORTHWEST MANAGEMENT
CORP., a Delaware corporation
By: /s/ Xxxxxx X. Xxxx
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Its SR. VP
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